Andre Yoskowitz
26 Apr 2012 18:31
According to sources, Spotify is creating an Internet radio service that will rival Pandora directly in the U.S.
The new format will launch by the end of the year and will be supported by advertising. Pandora is cheaper to operate than Spotify currently is because the royalty rates are lower and standardized by Congress.
Spotify currently has 10 million registered users around the globe, 30 percent of which are paying subscribers. Pandora, which launched just a year earlier than Spotify did in 2006, has 150 million registered users in the U.S. alone, with 50 million active.
How Pandora works is users can choose an artist, genre or specific track and the service will identify songs with similar melodies (and more) and create a playlist. Just like traditional radio, you cannot choose the tracks you hear. With Spotify, the entire catalog is available to you along with the ability to creat playlists from the tracks you want.
Differentiating the services is the fact that all music is available on Pandora, from all artists, while Spotify is missing music from artists like the Beatles and others. Spotify is also at the whim of the labels and artists, who can withhold new releases if they want to, or delay them.